My Brilliant (New) Career

Faced with tough economic times, these three savvy women chose to follow their dreams and created smart, profitable businesses. Here's how they did it. Ready to start your own business? Get expert tips on how to launch your new career.

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Many moms dream of starting their own businesses: Often, the allure lies in being able to both bring a smart idea to fruition and set their own hours around the kids' schedules. But in times like these, when everyone is feeling the pinch of the recession, such a plan may seem crazy.

Not necessarily. "Even in an economic downturn, there's opportunity for smart entrepreneurs," says Nan Langowitz, associate professor of management and entrepreneurship at Babson College in Babson Park, MA. Companies that use low-cost technologies, such as Websites to sell products, can do very well in a recession, Langowitz notes, "and if you can start a business in this economy, you're poised for tremendous growth in more prosperous times."

Of course, finding the perfect idea is critical. The women here developed enterprises that can survive — and even thrive — in tough times (and allowed them to bond with their kids). Here's the scoop on what they did right, and how you can succeed, too.

Turning a hobby into a job

Unexpected inspiration: Emily Caswell never planned on becoming a lip-balm mogul. But back in 2005, Caswell was getting frustrated with how little she earned as a freelance Web designer. She and her husband wanted to be saving more for their retirements and college for their children, now 9 and 10. The final straw: An important client hit by hard times had to cut back on her services, so Caswell went on the lookout for other ways to earn her living. When she and a friend made some homemade lip balms for Christmas gifts, "people who received them asked, 'Can I order 10 more of these?'" she recalls. In that moment, Caswell realized she'd stumbled onto a business idea.

Getting started: To get a quick introduction to the cosmetics field, Caswell spent $150 to join the Indie Beauty Network, a trade group for small businesses like hers. The group helped her find information on the laws regulating the industry, which, she learned, allowed her to make the cosmetics in her kitchen. Joining also enabled her to get product-liability insurance (important if you're making a product that's applied to the body) at an affordable rate. She invested a thousand dollars in equipment and supplies, created a Website to sell her products, and formed a limited liability company (LLC). The last was crucial, since it establishes that a business owner is not personally responsible for the company's debts, thus protecting personal assets.

Finding her niche: To distinguish herself in a crowded field, Caswell offered her products as customized favors (from citrus-and-ginger to pink Champagne) for bridal showers and bachelorette parties. She branched out slowly into children's lip balms and a small number of gifts for men to see what caught on.

The kiss of success: After ramping up to a 30-hour work week — a schedule that still allows her to take care of her kids — she is aiming for about $30,000 in sales this year. "Even in a recession, it's been the best year I've had so far," she says. Customers may cut back on wedding splurges in a downturn, she notes, but they're still willing to spend on small luxuries, like her lip balms at $30 for a 10-pack. "I consider this to be a potentially recession-proof niche," she says.

The expert's take: Caswell has done a lot of things right, says Nancy Spruiell, who, as owner of WholeSaleProductRep.com, helps cosmetics manufacturers market their wares. Start by joining whatever trade organization serves your business; that's a great way to stay on top of relevant laws. And while every business should have property and liability insurance, a trade organization can alert you to your field's special requirements and point you to good providers. You can also check with your state insurance department .

To build her brand, Spruiell suggests that Caswell put a page on etsy.com, the online marketplace for handmade goods. While this site charges a commission, it turns up often in Internet search results, which boosts a business's visibility — and, with luck, sales. Caswell may also want to build on her success by selling her products at crafts fairs and wedding trade shows.

Spruiell does advise Caswell to expand cautiously: "She should weigh whether she needs to hire help if orders increase, or put in more hours." Adding staff would allow her to increase her volume, but the greater cost might mean she'd have to raise her prices, which, says Spruiell, are now "spot-on for this economy."

Capitalizing on hobbies and off-hours skills

Looking for a life raft: When the telecommunications firm where Wendy Steele worked as an IT technician started aggressively downsizing in 2005, she decided it was time to develop a sideline — just in case. Steele, who has a daughter, 21, in college and a 16-year-old son, was always helping friends and colleagues fix up their résumés for free, and after she discovered that her sister was quoted a $400 price for the same service from a professional résumé-writing firm, Steele decided to go pro herself.

Easing into it: Placing a tiny ad in the Atlanta Journal-Constitution for about $60 and getting referrals from a recruiter who knew her work, Steele quickly found clients. Meeting one or two a week on her lunch hour, she drafted their résumés before and after work (her kids helped with dinner and other chores). As demand increased, Steele invested $500 in start-up costs, and her husband created a small Website for the business. By the time she was laid off in May 2006, she was ready to run her business full-time. Steele continued to get referrals from clients and business contacts, but also took out ads in phone books and distributed flyers.

Learning from mistakes: Steele initially set her prices to compete with the discount rates at her local office-supply store. But when she joined the Professional Association of Résumé Writers, her colleagues told her that given the quality of her work, she was significantly undercharging. "It's embarrassing," she laughs now. "I didn't know what I was doing." She raised her price for an executive résumé from $125 to as much as $455, adding to her business's profitability. Today she employs seven people, mostly part-time. Now that the company brings in close to six-figure revenues, she pays herself $800 to $1,000 a week depending on her sales — nearly doubling the salary she earned in corporate America.

The expert's take: Paying attention to coworkers' compliments about her résumé-writing talents was a good way for Steele to identify a business opportunity, says Alan Siege, who advises small firms as founder of Small Business Management Consulting in New York City. "The fact that so many of her friends needed this kind of help suggested that there was a market, and their favorable feedback proved that she could meet that need," he says.

If you are entering a new field, as Steele was, starting your business on the side can ease the learning curve. "Steele geared up in a way that gave her confidence without intense pressure to make money right away," Siege says. This gave her the wiggle room to change course when she took wrong turns — as she did with her pricing policy, where she had made a common error. If you provide a premium, personalized service, you need to charge for that attention, says Siege — not just for the number of hours you've worked.

Spotting a new niche

Cash crisis: Kim Harmon had a good job as director of a home health care agency. But she was also going through a prolonged divorce, and her increased living expenses, plus legal costs, were draining her finances. In late 2005, she started to worry about losing her house. Although her ex-husband helped support their two children, she knew her family could no longer survive on her salary. She simply had to make more money.

Her bright idea: The agency Harmon was working for served clients in government-funded programs such as Medicare, but Harmon, an RN, had noticed that families who paid privately were turning to home health care for loved ones in greater numbers, because it provided a less costly alternative to assisted living. It struck her that local families needed an agency that would supply high-quality help at reasonable rates.

Taking the plunge: In December 2005, Harmon left her job and took a 20-hour-a-week position teaching nursing for about $41,000 a year to keep her family afloat while she tried to launch her new company. She enrolled in a six-month entrepreneurship program at the University of Massachusetts Amherst to learn business basics, and on her instructors' advice, she researched her community's needs by finding census data on the number of seniors in her area and their average household incomes, which confirmed that there was a sizable market for her service. Harmon also investigated the competition and saw a way to distinguish her agency by offering extras, such as traveling hairdressers and restaurant companions. To find clients, she set up meetings with local hospitals, bringing lunches to encourage case managers and social workers to listen to her sales pitch.

Making the hard decisions: Along the way, Harmon had to make sacrifices, both personal and financial. She was able to sell her house quickly, and she moved her family to a small apartment, setting aside $20,000 from the home sale to start the business. She relied on a babysitter, her grandmother, and her sisters to watch her kids, now 9 and 11, while she worked. "It was a struggle," admits Harmon. She trusted that seeing so little of her children would be temporary, but it took three long months before she won a single client. Harmon remembers the fear and self-doubt she felt: "I cried a lot after the kids went to sleep," she says. By January 2007, she was attracting more clients, but she didn't take a salary for the first 18 months so she could devote her funds to paying staff (a full-time office manager and part-time caregivers) and building the company.

Success story: Today, Harmon employs eight people at her office and has 70 caregivers she works with. With her company grossing about $1.4 million annually, she paid herself $85,000 last year — about 25 percent more than she made at her last full-time job. But she says her biggest reward for all the hard work is that she now has the flexibility to spend more time with her children.

The expert's take: Harmon was smart to spot a new niche in a field she knew well, says Langowitz. Accepting financial sacrifice and compromise — e.g., selling her house and working part-time as a safety net — was a strategy that paid off, as was deferring her salary so she could hire the staff needed to start up properly. If you must pay yourself right away, that doesn't have to derail your business plans, Langowitz says. For example, if your plan is to create a one-person marketing firm from your home, you can get by if you draw a modest income. But if you aim to start the next Body Shop, taking a full salary early on may force you to put off needed expenses (such as hiring employees) until your sales increase — or until you find other funding.